A £4.5billion redevelopment of Brent Cross shopping centre has been given the go-ahead after the lifting of a Labour-imposed block.

The 151-hectare scheme - one of the capital's biggest regeneration projects - will create 7,500 homes and a commercial district alongside the country's oldest indoor shopping mall. That will be rebuilt with new John Lewis and Tesco stores at its heart.

Developers Hammerson and Standard Life estimate the 20-year project, which also involves rebuilding three schools and Cricklewood Midland Main Line railway station, will create 27,000 jobs. Work should begin in 2014, two years later than hoped.

Hundreds of residents, mainly from neighbouring Brent, feared the plan would cause traffic jams in an already busy part of north-west London. Barnet council had approved the scheme last November but Labour's John Denham, then Communities Secretary, put it on hold to consider whether to order a public inquiry.

However, officials acting for Eric Pickles, who now holds the post, say his intervention "would not be justified" - allowing development to proceed. Mayor Boris Johnson is also in favour of the scheme.

One of the largest such deals yet signed, it is worth almost £1billion of investment in new community and transport infrastructure and environmental measures.